Direct Answer
Cisco Systems (CSCO) reported total revenue of $53.803 billion in fiscal year 2024, the fiscal year ending July 27, 2024. Revenue declined approximately 6% from $57.0 billion in FY2023 because enterprise customers worked down excess networking equipment purchased during the COVID-era supply shortage. Gross margin was approximately 65.5%, GAAP net income was $10.321 billion, and GAAP diluted EPS was $2.54. The $28 billion Splunk acquisition closed in March 2024, adding security and observability revenue in the final months of the fiscal year.
Revenue overview: product vs. service split
| Revenue category | FY2024 |
|---|---|
| Product revenue | $30.0B |
| Service revenue | $23.8B |
| Total revenue | $53.803B |
Cisco reports revenue in two top-level categories: product and service. Product revenue covers hardware and software licenses sold to customers, including networking switches, routers, wireless access points, security appliances, and software subscriptions. Service revenue covers maintenance contracts (support agreements that give customers access to software updates and Cisco's technical support organization) and professional services such as implementation, consulting, and managed services.
The service revenue base is particularly valuable because support contracts typically renew annually or multi-year, creating a recurring revenue stream that is less susceptible to enterprise capex cycles than product revenue. When customers pause hardware purchases during an inventory digestion period, the service revenue line continues to grow as the installed base of equipment under support contract remains in place.
Revenue by segment
| Segment | FY2024 (approx.) | Description |
|---|---|---|
| Networking | ~$28.7B | Switches, routers, data center networking, wireless |
| Collaboration | ~$4.2B | Webex, calling, meetings, contact center |
| Security | ~$4.0B | Firewall, zero trust, identity, Splunk (partial year) |
| Observability | ~$0.9B | AppDynamics, ThousandEyes, Splunk (partial year) |
| Services (maintenance + professional) | ~$14.9B | Support contracts, professional services, advisory |
Networking is Cisco's largest segment by a wide margin, reflecting the company's dominant position in enterprise switching and routing. Campus and data center switches in particular represent the installed base on which Cisco's service renewal business depends. The Security segment benefited from the addition of Splunk in the final months of FY2024, though the full financial effect of that acquisition will appear more clearly in FY2025.
Source: Cisco Systems: Form 10-K SEC Filings (CIK 0000858877)
Key financial metrics (FY2024)
| Metric | FY2024 value |
|---|---|
| Total revenue | $53.803B |
| Gross margin (GAAP) | ~65.5% |
| Operating income (GAAP) | ~$13.4B |
| Operating income (non-GAAP) | ~$17.5B |
| Net income (GAAP) | $10.321B |
| Diluted EPS (GAAP) | $2.54 |
| Diluted EPS (non-GAAP) | ~$3.73 |
| R&D expense | ~$7.7B |
| Free cash flow | ~$15.8B |
| Quarterly dividend per share | $0.40 ($1.60 annualized) |
GAAP vs. non-GAAP earnings
Cisco's GAAP diluted EPS of $2.54 and non-GAAP diluted EPS of approximately $3.73 differ by a meaningful amount in FY2024, largely because of costs associated with the Splunk acquisition. The non-GAAP figures exclude acquisition-related charges such as amortization of acquired intangible assets, restructuring charges, and share-based compensation expense. Cisco's management and most equity analysts track non-GAAP results to evaluate underlying business performance separate from the accounting treatment of M&A activity. Investors should understand both figures: GAAP results reflect the actual economic costs reported under accounting standards; non-GAAP results strip out items that management considers non-recurring or non-cash.
R&D investment
Cisco spent approximately $7.7 billion on research and development in FY2024, representing roughly 14% of total revenue. This level of R&D investment reflects Cisco's sustained commitment to product innovation across networking, security, and AI-enabled infrastructure. Cisco has been investing in silicon design (the Cisco Silicon One family), AI-driven network management (Cisco Catalyst Center), and security products that address cloud and hybrid environments. The R&D intensity increased in FY2024 partly because of costs associated with integrating Splunk's engineering teams and product roadmap.
Dividend and capital return
Cisco has increased its quarterly dividend every year for more than 13 consecutive years as of FY2024, making it one of the longer-running dividend growth records in the technology sector. The quarterly dividend rate of $0.40 per share, or $1.60 annualized, is supported by Cisco's substantial free cash flow of approximately $15.8 billion in FY2024. Cisco has also maintained a consistent share repurchase program alongside the dividend. Capital return to shareholders through dividends and buybacks has been a core element of Cisco's investor value proposition for over a decade.
Free cash flow
Free cash flow of approximately $15.8 billion in FY2024 was significantly higher than GAAP net income of $10.321 billion. The difference reflects the non-cash nature of depreciation, amortization (including amortization of acquired intangibles), and share-based compensation, which are deducted in GAAP earnings but do not consume cash. Free cash flow is the metric most directly relevant to assessing Cisco's ability to sustain dividends, repurchase shares, and fund future acquisitions without relying on external financing.
Splunk acquisition impact on FY2024
Cisco closed the acquisition of Splunk, a data analytics and security information and event management (SIEM) platform, for approximately $28 billion in cash in March 2024. This was the largest acquisition in Cisco's history at the time it was announced. The deal closed partway through Cisco's FY2024 fiscal year, meaning Splunk's revenue and costs were consolidated into Cisco's results only for the final four to five months of the fiscal year.
Splunk added revenue primarily to Cisco's Security and Observability segments. Splunk's core product is a platform for ingesting, indexing, and searching machine-generated data, used extensively for security operations (detecting and investigating threats) and IT operations analytics. Cisco's strategic rationale was to combine Splunk's data ingestion and analytics capabilities with Cisco's existing network visibility and security portfolio to create a more complete security operations platform.
The acquisition contributed to higher GAAP expenses in FY2024 compared to prior years. Amortization of acquired intangible assets, deal-related transaction costs, and restructuring charges associated with workforce rationalization following the combination all weighed on GAAP operating income and net income. The GAAP operating income figure of approximately $13.4 billion and non-GAAP operating income of approximately $17.5 billion in FY2024 reflect a gap of roughly $4 billion, a substantial portion of which relates to Splunk acquisition-related accounting charges.
Cisco management indicated that Splunk was expected to be accretive to non-GAAP EPS in FY2025, the first full year of ownership, as integration costs normalize and revenue synergies begin to materialize. The full picture of Splunk's contribution to Cisco's financial profile will be clearer in subsequent annual filings.
Frequently Asked Questions
What was Cisco's total revenue in fiscal year 2024?
Cisco reported total revenue of $53.803 billion in fiscal year 2024, which ended July 27, 2024. That represented a decline of approximately 6% from $57.0 billion in FY2023. The drop was cyclical rather than structural: customers were working down excess networking inventory purchased during COVID-era supply shortages, a pattern widely called the post-COVID inventory digestion cycle.
Why did Cisco's revenue fall in FY2024?
Cisco's FY2024 revenue fell roughly 6% because enterprise and service-provider customers entered an inventory digestion period. During the COVID-era supply shortage, many customers placed orders well in excess of immediate needs to guarantee delivery. Once supply chains normalized, they stopped placing new orders until they had consumed the existing stock. This was a demand-timing problem, not a loss of market share. Cisco's order backlog and customer engagement remained intact through the period.
What is Cisco's dividend history and yield?
Cisco has paid a quarterly cash dividend every year for more than 13 consecutive years as of FY2024, with at least one annual increase each year over that period. The quarterly dividend rate stood at $0.40 per share in FY2024, which equals $1.60 annualized. The company generates substantial free cash flow (approximately $15.8 billion in FY2024) that comfortably covers the dividend. Cisco is often cited as a dividend growth stock within the technology sector.
How did the Splunk acquisition affect Cisco's FY2024 financials?
Cisco closed its acquisition of Splunk for approximately $28 billion in March 2024, partway through FY2024 (which ended July 27, 2024). Splunk contributed revenue to Cisco's Security and Observability segments in the final months of the fiscal year. The acquisition added meaningful scale to Cisco's security and data analytics businesses but also contributed to higher operating expenses and amortization of acquired intangible assets in the GAAP results. Non-GAAP figures, which exclude acquisition-related charges, show a cleaner picture of underlying profitability. Cisco's non-GAAP diluted EPS of approximately $3.73 in FY2024 compares to GAAP diluted EPS of $2.54, with the difference driven largely by acquisition costs.